Which of the Following Statements Is Correct About a Corporation

Multiple Choice

Which of the following statements is correct about a corporation that borrows from its bank at "Prime plus 1 percent"? The interest rate:

A) is set at a level of the prime rate at initiation of the loan, plus 1 percent.
B) can fluctuate up to 1% upward over the life of the loan.
C) can be changed upward but not downward over the life of the loan.
D) can be changed upward or downward in accordance with prime rate changes over the life of the loan.